Tax Deductions for Sales Professionals

Whether you’re a real-estate agent, car sales person or sales rep, working in sales can be a demanding job! There’s always another contract to close or client to follow up. With so many demands for your time, it’s not surprising that we often get questions about tax deductions for sales professionals. They’re unsure what they can (and can’t) claim on their tax return each year.

At Etax, we’re here to help! We’ve put together a comprehensive list of possible tax deductions for sales professionals. Read on and make sure you don’t leave any money on the table this year!

Tax deductions for sales professionals: the basics

Work-related travel and car expenses

Do you ever travel as part of your sales job? Whether it’s meeting clients or travelling between offices, travel expenses are one of the most commonly claimed deductions for sales professionals. Additionally, this can include public and commercial transport or the cost of using your own vehicle for work-related travel.

Keep in mind, there are a few exclusions to observe and processes you will need to follow to claim these expenses. Usually, you can’t include trips from work from home (or vice-versa).

And, if you use your own vehicle, you have two methods available for claiming your car expenses:

1. If you drive more than 5,000km during the year the logbook method will likely put the most money in your pocket at tax time. Simply record all work-related AND private trips in a logbook over a 12-week period. This allows you to calculate you work related use of the car and claim a percentage of all your car expenses for the year.
2. Or, if you only drive sporadically (less than 5,000km) you can use the cents per km method to claim. Check the current cents per km rate here.

Work-related travel tax deductions for sales professionals can also include:

• Bus fares
• Train fares
• Taxi fares
• Hire car expenses
• Plane flights
• Private car use (read our blog on car expenses for full details on how and what to claim)
• Bridge and road tolls

Example #1 Real Estate:

Mary-Anne is a real estate agent. As part of her job, she drives from her office to multiple sites daily to conduct inspections for prospective buyers and tenants. She uses her private car to make these trips and records all of her business and personal travel in a logbook for 12 weeks.  

At the end of the 12 weeks, Mary-Anne calculates that 80% of her car travel is work related. This means at tax time she can claim 80% of all out of pocket car expenses (fuel, rego, insurance, interest, maintenance etc) as a work related expense to boost her refund.

Home office running expenses

Are your required to work at home after hours, or do you occasionally work at home during the day? This could be as part of a work from home agreement or during school holidays? If you do, then you may be able to claim home office expenses.

From 2023, you can claim the running expenses of your home office in two ways:

• Actual Cost Method: The amount of actual running expenses incurred by recording an established pattern of use.
• Or Revised Fixed Rate Method: Calculated at a rate of 67 cents per hour.

Be careful – don’t claim home office costs if, for example, you just check your emails in the evening out of habit while watching TV. The ATO is on the lookout for people overclaiming home office expenses so if you’re not sure – always ask your accountant.

Example #2 Car Sales Person:

Kylie is a car sales person for a local dealership. During the busy sale season, Kylie’s day is often taken up with showing cars to potential buyers. For this reason, she often takes her work laptop home to finish off contracts on the weekend to make sure she closes the deal! 

Kylie claims the running costs at standard 67 cents an hour. Therefore, Kylie discovers that she works at home for 8 hours a week ($0.67 x 8=$5.36) for 48 weeks of the year. That’s $257.28 Kylie can claim back on tax!

Mobile phone expenses

It’s pretty common for sales professionals to spend large parts of their day on the phone talking to clients and making deals.

If that sounds like you, and you use your personal mobile phone for these calls then you can claim a work-related percentage on your next tax return.

Example #3 Business Development Manager

Mark is a business development manager for a construction company and spends a lot of his day using his personal phone to arrange appointments. To claim a mobile phone deduction on his tax return, Mark first needs to look at his monthly phone bill to determine what percentage of his calls are work related.

If Mark makes 60 phone calls during the month, and 24 of them were for work, then 40% of his phone calls were work-related. That means that he can claim 40% of his monthly phone bill. So, if his monthly phone bill was $109, he can claim $43.60 per month multiplied by 12 months. In other words, he can claim $523.20 of work related mobile phone expenses his tax return.

Work-related tools and equipment

Have you bought tools or equipment, like a tablet or a laptop bag for your job? Perhaps you’ve purchased a license for some software? If any of these apply to you, make sure you include them on your return to maximise your refund.

Tax-deductible work-related tools and equipment for sales professionals include:

• Purchase or leasing costs of laptops and tablets
• Computer accessories such as USBs, cables and headphones
• Stationery, including diaries and notebooks
• Software and stock license fees
• Work-related personal phone expenses
• Protective items
• Repair costs for work-related tools and equipment
• Insurance premiums for work equipment

Example #4 Sales Rep:

Trent is a sales rep for an online software company and often carries his laptop and product samples to business meetings. He purchases a laptop bag suitable for carrying both for $175.

Trent can claim the purchase of the laptop bag as a work related deduction because:

• There is a clear connection between the bag and Trent’s work activities, and
• Trent only uses the bag for work related purposes (so he does not need to apportion his claim by work vs personal use).

Self-education deductions for sales professionals

As a sales professional, chances are you have some specialised skills that help you build relationships with your clients. But did you know that you can claim the cost of keeping your sales skills up to date each year?

Whether it be attending networking conferences or facilitated learning, professional development is essential to stay ahead in your career. You can claim self-education and development expenses if you undertake job-related training or are required to attend networking events.

Common self-education deductions sales professionals can make include:

• The fees for short courses or university courses directly related to your work.
• Course related expenses including:
  • Internet
  • Phone calls
  • Travel costs
  • Accommodation and meals (if the course requires an overnight stay)
  • Tools and equipment required to undertake the course
  • Books and training manuals

If you plan to claim self-education expenses on your tax return, the training must be directly related to your current job.

For example, if you’re a real estate agent you could claim the cost of a real estate seminar you attended, but a fashion design course you did in your spare time would not be allowed.

Check out this post for much more information on claiming self-education expenses.

Other common tax deductions for Sales professionals

• Union and professional association fees
• Charity donations
• Subscriptions to job related journals and magazines
• Income protection premiums paid outside of Super
• Tax agent fees for preparing your prior year’s tax return